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MSG Sphere, the long-awaited, globe-shaped venue under construction in Las Vegas, has been promised to revolutionize the concert-going experience. Before it even opens, however, MSG Sphere is transforming the corporate structure of its creator.
On Monday, MSG Entertainment announced new plans for an upcoming spin-off that will separate MSG Sphere, the next-generation music venue being built in Las Vegas, from the rest of its live music business.
The latest version of the proposed transaction results is a pure-play music company under the corporate name MSG Entertainment that includes venues such as Madison Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre. MSG Entertainment would also include the entertainment and sports booking business, the Radio City Rockettes and the Christmas Spectacular production, and long-term arena license agreements with New York Knicks and New York Rangers, which play their home games at Madison Square Garden.
The first iteration of the spin-off paired the live music business with MSG Networks, a regional sports network that carries live games of the Knicks, Rangers, New York Giants, New Jersey Devils, New York Islanders and Buffalo Sabres. That would have put the company’s two most mature divisions under one roof, separate from MSG Sphere and Tao Group Hospitality, the operator of restaurant and nightlife properties. MSG Entertainment would, however, combine the financially risky Sphere project with the more stable revenues of MSG Networks, which generated $608.2 million of revenue and $131 million of operating profit in the year ended June 30, 2022. The new plan “is optimal for maximizing shareholder value, while providing both companies with enhanced strategic and financial flexibility to drive long-term growth,” the company said in a statement.
The new spin-off plan puts MSG Networks with MSG Sphere and Tao Group Hospitality. The spin-off company will take the name MSG Sphere Corp and “would have enhanced flexibility to execute its business strategy and pursue global growth opportunities,” executive chairman and CEO James L. Dolan said in a statement.
The proposed transaction would be structured as a tax-free spin-off to all MSGE shareholders. Owners of MSGE Class A and Class B shares would receive a pro-rata distribution expected to amount to about a two-thirds economic interest in MSG Entertainment, the live entertainment company. The parent company, MSG Sphere, would retain approximately a one-third interest in MSG Entertainment.
The $1.8 billion MSG Sphere at The Venetian is slated to open in 2023 with a U2 residency. The spherical venue will provide a multi-sensory experience of audio and visuals for 20,000 standing spectators or 17,500 seated guests. It includes 160,000 square feet of video viewing space and an exterior exosphere with programmable LED technology.
By the early 1990s, Fleetwood Mac was running on fumes. The group’s 1990 album, Behind the Mask, peaked at No. 18 on the Billboard 200, and Stevie Nicks and Christine McVie, who died on Nov. 30, hinted that they were done touring.
Then the band got some valuable exposure from an unlikely place: Bill Clinton’s 1992 presidential campaign. As Clinton told Billboard, a supporter who drove him to an event in Los Angeles suggested that he use the song and “I knew it was a brilliant idea.”
At the time, with George H. W. Bush in the White House after eight years of Ronald Reagan, the song was like a breath of fresh air: Upbeat, optimistic, and full of the rock n roll sensibility that Clinton symbolized as the first Baby Boomer to serve as president. Clinton himself was a musician – a saxophone player good enough to perform on The Arsenio Hall Show as well as a fan, so it made sense to have a song that reflected his perspective.
“Honestly, Bill and Hillary [Clinton], that was one of their favorite songs,” remembers Paul Begala, the chief strategist of the 1992 campaign who became a counselor to the president after he won. “He had grown up with dreams of becoming a musician and he loved that band.”
In some ways, “Don’t Stop,” which peaked at No. 3 on the Hot 100 in 1977, wasn’t an obvious choice. “Once I got in the race,” Clinton told Billboard, “some of my staff tried to get me to go with a more current song.”
But it worked.
“That song encapsulated everything,” Begala tells Billboard. “He started insisting we play it at every rally – he just loved it. He also loved that Garth Brooks song ‘We Shall Be Free,’ but he settled on ‘Don’t Stop’ because of the message.”
Some of that was the implication that the future belonged to the Baby Boomers. “His conception of Bush was that he was a good man but his time had come and gone,” Begala says. Some of that involved the concept of “future preference,” an idea Clinton learned about from his Georgetown University professor Carroll Quigley.
Quigley “said that America became the greatest nation in history because our people had always embraced two important ideas: that tomorrow can be better than today, and that every one of us has a personal, moral obligation to make it so,” Clinton said. “’Don’t Stop’ captured the sentiment perfectly with both its lyrics and its upbeat, simple melody.”
Fleetwood Mac appreciated his use of the song, and the Rumours-era lineup – Nicks, McVie, John McVie, Mick Fleetwood and Lindsey Buckingham – reunited to play its first show in six years at Clinton’s inaugural ball. That seems to have boosted the band’s sales, and the Feb. 6, 1993, issue of Billboard reported that the band’s Greatest Hits jumped from No. 30 to No. 11 on the Catalog Albums chart, while Rumours debuted on that chart at No. 36.
By 1997, the band’s classic lineup was back together again – first for a show that was recorded for the live album and TV special The Dance, then for a tour that ran through much of that year. The next year, Fleetwood Mac was inducted into the Rock and Roll Hall of Fame.
In January 2001, Fleetwood Mac reunited to perform at a farewell party for Clinton on the White House lawn. “On one of his last days as president, the staff organized a farewell party on the South Lawn and the band surprised him,” Begala remembers. “I introduced Fleetwood Mac and they started playing ‘Don’t Stop’ and there wasn’t a dry eye in the house.” The band played an 11-song set.
“It was one of the most amazing moments of my life,” Begala says.
Clinton told Billboard that he would always be grateful to Christine McVie and her bandmates for letting him use the song, reuniting to play his inaugural ball and “for giving me a lifetime of great music and memories, and, of course, for that roadmap to the future.”
SoundCloud has linked up with Third & Hayden, the Atlanta management and services company founded by music exec Kei Henderson, for a joint venture, the companies announced today (Dec. 5). The new venture will see Third & Hayden signing new acts to its label and developing them with the help of SoundCloud’s services division, which will provide marketing, A&R, distribution and promotion support, as well as financial backing.
The first two acts to sign to the new venture are Los Angeles singer/songwriter Jordan Hawkins and Atlanta-based rapper Key!.
The deal is the latest for SoundCloud’s new roster initiative, which has previously inked a joint venture with Quality Control’s Solid Foundation Management to work on new acts and signed distribution deals with Lil Pump, Tekno and Aly & AJ to release forthcoming projects. Henderson, meanwhile, has an extensive background as a manager over the past decade, beginning with Key! 10 years ago, who then introduced her to 21 Savage in the mid-2010s; Henderson would go on to co-manage Savage for several years as he rose from the mixtape circuit into one of the most influential rappers of the past half-decade. Henderson then co-founded SinceThe80s, a joint venture with Motown/Capitol Music Group, where she first worked with Hawkins, and founded Third & Hayden, which also manages artists like Asiahn, Ben Reilly and Kenneth Whalun, among others.
“We want artists to find success as independents to set the foundation for long-term careers and move through their careers with leverage, and creative control. What we were able to build with 21 Savage early and again with SinceThe80s is the blueprint for the way we’re working with our artists and I’m so thankful to have been a part of both of these brands from the start,” Henderson said in a statement announcing the deal. “SoundCloud is typically one of the first touch points for indie artists and I feel a great part of my career has been brand building with artists from day zero — for this reason they’re the best partner for what we’re building. We’re being intentional on ground up development.”
In an interview with Billboard, Henderson further broke down the reasoning for going with SoundCloud, after previously working through Distrokid and then Epic Records for 21 Savage and with Motown/Capitol with SinceThe80s.
Kei Henderson
Courtesy Photo
“I think it was the understanding that building isn’t an overnight thing,” she said. “It will allow me to fund their careers from a startup level in a way that includes advances, recording budgets and marketing budgets. We’re always gonna be scrappy and resourceful, but it’s always nice to have a little bit of money to be able to do certain things with. So we’ll be able to activate digitally a little more than we would be able to as a completely unfunded independent, and I like that, and it also allows me to have access to a full team. Because the team they’re hiring at SoundCloud looks like a label, but not everybody is from a label background, so the thinking is a little bit different and the approach to how we market an artist is a little bit different.”
In the past few years, SoundCloud has pivoted its business model away from being solely a streaming platform and more towards becoming first a distributor, then towards full-service artist and label support, a shift that is concurrent with similar moves across the industry. The company has also introduced user-centric royalties, what it calls Fan-Powered Royalties, that pay artists based on the number of streams that they accrue rather than through market share of total streams; in July, SoundCloud struck a deal with the Warner Music Group to allow the major’s artists to get paid in that way on its platform, in addition to indie artists.
“Kei has a proven track record of finding and fostering the next generation of talent, so partnering with Third & Hayden was simply the right fit,” SoundCloud’s global senior vp/general manager Jessica Rivera said in a statement. “We’re excited about developing this joint venture with such a respected industry leader and creative who shares SoundCloud’s dedication to providing solutions and empowering artists as they take their careers to the next level on their own terms.”
In addition to the joint venture, Henderson recently opened console by 2NDBDRM in Atlanta, a record shop, listening room and retail space in the city’s Ponce City Market for artists and music fans in the city to have a community space to come together, which will feature some small-scale performances and in-store appearances, consistentl with her idea of wanting to grow artists’ careers not just digitally, but through live events and in-person experiences.
“I don’t think what works for one artist works for every single artist, so we do take into consideration how the artist wants to build their career over a long period of time,” Henderson says about the approach the label will take. “Some artists may feel like, after three projects, I want to go to a major, and that’s perfectly fine. So I want to leave it open-ended: whatever you want to do, let’s put a team around the artist that gets us to that long-term goal.”
Overall, Henderson says, the goal is to build an actual audience for artists, a prospect increasingly difficult in a TikTok world where virality can mean a record deal, but not necessarily a dedicated fan base. “I think what we’re missing in the industry as a whole is, everyone’s in such a hurry to get their money back, and I get that from a business perspective,” she says. “But from a manager perspective, it’s like, some of you want to get your money back but you’re not actually building a fan base or building a connection between the fan and the artist. And sometimes that takes a little bit longer to get it done properly.”
Universal Music Group (UMG) will expand its early career development program, Bonus Tracks, to Atlanta’s Frederick Douglass High School and through Motown Museum’s Hitsville NEXT in Detroit in the coming spring semester, the company tells Billboard. Last spring, UMG completed its first year in New York at Brooklyn’s Pathways in Technology Early College High School (P-TECH).
Bonus Tracks is dedicated to discovering and developing a diverse set of future executive talent by giving students in grades 11 and 12 the opportunity to learn about the music industry through immersive programming while being provided with transferrable skills. During the multi-week program, participants attend weekly meetings at a UMG label with executives from all areas of the company, including creative, marketing, commercial partnerships and promotion.
UMG has also created the Bonus Tracks Scholarship Award, a college scholarship that will be given to one Bonus Tracks student in each city who are recognized for their community leadership, commitment to academic excellence and completion of the program, including the presentation of their capstone project.
The Bonus Tracks program was launched in 2019 in partnership with Capitol Music Group (CMG) and the Compton Unified School District at Dominguez High School in Los Angeles. It later expanded to Nashville through Capitol Christian Music Group and Pearl-Cohn Entertainment Magnet High School. It was founded by Brian Nolan, executive vp and executive vp of marketing at Motown; Patrick Stephens, manager of brand partnerships at CMG; and Micah Ali, president emeritus of the Compton School District.
“We’re excited to see Bonus Tracks continue to expand and look forward to bringing the program to students in Detroit and Atlanta,” said Nolan. “We knew Bonus Tracks could thrive and scale in the most meaningful ways in order to reach the next generation of music industry leaders. I am grateful to Micah Ali for his partnership in this incredible journey and to UMG for fully embracing and supporting the vision of the program: inspiration, education, and pathway.”
“Bonus Tracks has always been about giving students the opportunity to learn about career pathways in a way that meets their passion for music and curiosity about the industry,” added Ali. “As this program moves into its fifth year, I’m incredibly honored to continue to expand this program to reach students across the country.”
“Motown Museum’s Hitsville NEXT is devoted to supporting creativity in today’s young artists, entrepreneurs and changemakers,” said Robin Terry, chairwoman and CEO of the Motown Museum. “Partnering with Bonus Tracks is a perfect reflection of our mission. We can’t wait to work with the entire Detroit Public School system and grow this great program in our community.”
“With Atlanta being the music capital of the south, Frederick Douglass High School has produced some of the most famous music industry icons such as T.I., Lil Jon, and Killer Mike, to name a few, said Erika Y. Mitchell, a school board member of Atlanta Public Schools. “Bonus Tracks will create pathways for our students to learn about the music industry’s business, provide mentorships with music executives, and allow our students post-graduation to have access to internships at Universal Music Group or receive a scholarship toward college.”
Mitchell added that she’s “looking forward to expanding” the Bonus Tracks program to Atlanta’s Benjamin E. Mays High School “in the near future.”
“It is critically important for UMG to provide early career opportunities as an investment in the future of this industry, both from a business and fan perspective,” said Natoya Brown, senior vp of people inclusion and culture at UMG. “Bonus Tracks is a way to begin discovering and cultivating the next generation of music industry leaders.”
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
After a miserable year for music stocks — and stocks in general — 2022 could end on a string of positive notes.
As rising interest rates have hammered stocks and erased big gains made during the pandemic, the Billboard Global Music Index, a float-adjusted group of 20 publicly traded music companies, is down 36.1% in 2022, and shares of vital companies such as Spotify and Warner Music Group are down 65.7% and 20.5%, respectively.
But in recent weeks, the momentum has reversed dramatically. The Billboard Global Music Index is up 12.6% over the last two weeks and 14.6% in the five weeks since Oct. 28.
Since Oct. 28, the week when music companies began to release third-quarter financial results, the stocks of major labels rose an average of 23.1%. Indie music companies — Reservoir Media, Believe, Hipgnosis Songs Fund and Round Hill Music Royal Fund — rose an average of 8.2% over that time period. K-pop companies from South Korea averaged a 16.1% improvement.
Part of music stocks’ rebound can be attributed to overall market sentiment. Stocks have improved in recent weeks — the New York Stock Exchange composite index is up 6.6% in the last five weeks and the S&P 500 is up 4.4% over that time. This week, stocks surged on Wednesday (Nov. 30) after Federal Reserve chairman Jerome Powell said upcoming interest rate hikes will be smaller following “promising developments” in the Fed’s efforts to slow inflation. Stocks gave back some of those gains on Friday, however, after a solid U.S. jobs report showed a combination of strong hourly earnings and lower labor force participation. Higher wages erode corporations’ profits and persistent inflation could mean more rate hikes by the Federal Reserve.
But music companies have outperformed the broader stock markets thanks to solid third-quarter earnings results that met and occasionally exceeded expectations. In addition, many companies increased their fourth-quarter guidance when they announced third-quarter results. That tends to increase share prices as investors adjust upward their expectations for future performance.
Among the best performers of late has been Warner Music Group, whose shares improved 31.1% in the last five weeks. Last week, Warner beat analysts’ expectations for both revenue and earnings per share in the fiscal fourth quarter ended Sept. 30 and announced on Nov. 22. It posted revenue of $1.5 billion, up 16% year-over-year at constant currency (+9% as reported). Adjusted earnings before interest, taxes, amortization and depreciation grew by 16% to $276 million.
Shares of Universal Music Group have risen 16.1% since Oct. 28. The day prior, UMG’s third-quarter earnings showed a 13.3% jump in revenue at constant currency. Sony Corp., the parent company of Sony Music Group, climbed 23.7% over the same period. Sony Music’s quarterly earnings, released on Nov. 1, showed 5.9% year-over-year revenue growth. Sony’s music division accounts for just 11.4% of the company’s consolidated revenue and 16.7% of its operating income while UMG and WMG are pure-play music companies.
Smaller labels and publishing companies have improved, too. Reservoir Media shares have climbed 14.9% over the five weeks, while shares of Believe rose 19.1% over five weeks but stumbled 7.8% in the last two weeks. Both companies raised guidance for their fourth quarter results. Korean music companies have also fared well: the shares of four K-pop-focused companies — HYBE, SM Entertainment, YG Entertainment and JYP Entertainment — rose an average of 16.1% in the last five weeks.
Labels’ and publishers’ financial results were augmented by positive news that suggests even stronger streaming revenue in 2023. According to WMG CEO Stephen Cooper during the company’s Nov. 22 earnings call, announcements of price increases by Apple Music [on Oct. 24] and Deezer “in the current economic environment shows that music subscription services offer amazing value to consumers. Music remains undervalued, but we’re optimistic that there will be other increases to come.”
Cooper was also encouraged by subscriber growth reported by streaming companies. Spotify exceeded expectations in the third quarter by adding seven million subscribers — 1 million more than its guidance. YouTube announced on Nov. 11 it had reached 80 million subscribers of YouTube Music and Premium just 14 months after surpassing the 50-million mark. “Developed markets continue to grow in the double digits while emerging markets are growing at higher percentages,” said Cooper. “With global smartphone penetration expected to increase meaningfully in the coming years, our conviction in streaming growth remains strong.”
While labels and publishers have surged, streaming companies have been mixed. On average, streaming companies’ stocks rose 24.4% over the last five weeks. The biggest gains came from much smaller Tencent Music Group and Cloud Music, up 101.6% and 28.4%, respectively — but both have relatively small floats and remain majority owned by Tencent and NetEase, respectively. Even smaller yet are Anghami (-3.1%) and Deezer (-1.5%). Spotify, one of the largest companies in the index, declined 3.7%.
Companies in the live and ticketing space haven’t fared as well as others, however. Live Nation shares are down 7.7% in the last five weeks, due mainly to a 7.5% drop following its third-quarter earnings release and a 10.3% decline on Nov. 18 following reports that the company was being investigated by the Department of Justice after its controversial presale for Taylor Swift’s upcoming tour. The latter was a short-lived dip, however, and Live Nation shares have reclaimed that lost ground and more by rising 11.6% in the last two weeks. Over five weeks, MSG Entertainment shares rose just 2% and Vivid Seats shares are off 1.2%. On the other hand, shares of German concert promoter CTS Eventim rose 27.7% over five weeks after posting strong third-quarter results and sounding more confident about full-year results than comments it made in its second-quarter earnings release.
Four radio companies — iHeartMedia, Cumulus Media, Audacy and Townsquare Media — have fared the worst, falling an average of 6.8% since Oct. 28. IHeartMedia, the largest radio company and a member of the Billboard Global Stock Index, fell 9% over that time.
Jeff Blackburn is retiring.
The head of Amazon’s Global Entertainment Group will sign off from the company in January after more than two decades with the retail giant and streaming platform. The moves were announced Friday via internal memos from Amazon CEO Andy Jassy and Blackburn himself.
The news comes a year and a half after Blackburn returned from a yearlong sabbatical in a new role as head of the company’s global entertainment group that included combined oversight of music, audio entertainment, games and video for the company.
Blackburn’s decision to retire comes after a busy week at Amazon. The e-commerce giant this week fully integrated MGM into its exec ranks after its $8.5 billion purchase of the storied studio closed in May. Amazon Studios head Jennifer Salke was given oversight of MGM’s film and TV divisions, while senior vp Mike Hopkins landed premium cable network Epix and unscripted content. With Blackburn’s exit, Hopkins will report directly to Jassy. Salke, who won MGM’s film oversight, reports to Hopkins.
Before his sabbatical, Blackburn had been a key intermediary between Amazon’s head office, Amazon Studios and head Jennifer Salke as Amazon Prime competes in an increasingly competitive streaming space with Netflix and new Hollywood studio entrants.
With Blackburn’s retirement, Jassy said Hopkins will continue to lead Prime Video, Amazon Studios and MGM and will report directly to the CEO. Steve Boom will now add Audible, Twitch and games on top of Amazon’s music and podcasting teams, also reporting to Jassy.
Here are memos from Jassy and Blackburn:
I wanted to share the news that Jeff Blackburn has decided to retire from Amazon.
Jeff joined Amazon in 1998 after helping guide the company through its IPO at Deutsche Bank. He’s done a lot of building over two-plus decades, including helping build our 3P marketplace, Advertising, Amazon Studios/Prime Video, and Music businesses, as well as leading our A9/Search and CorpDev & BusDev orgs.
As you know, Jeff returned to Amazon in May of last year to lead our media and entertainment businesses (Prime Video and Amazon Studios, Music, Podcasts/Wondery, Audible, Games, and Twitch). Over the past year and a half, he’s helped set us up for continued success in media and entertainment. Just to name a few successes, in its first season, Rings of Power broke all previous Prime Video records for the most viewers, and has driven more Prime sign-ups worldwide during its launch window than any other previous content; the first season of Thursday Night Football on Prime is driving higher viewership across the board than last year’s linear TV results for TNF, including with the important 18-34 age demographic where viewership has grown 20% over last season; and we recently closed and integrated the acquisition of MGM. Amazon wouldn’t be the same company without Jeff, and I’d like to thank him for his many contributions to the company’s success thus far and in the future.
We’re going to take this time to make some leadership changes. Mike Hopkins, who leads Prime Video, Amazon Studios, and MGM, will continue to lead these teams and report to me directly. Steve Boom, who has been leading our Music and Podcasting teams, will also now oversee our Audible, Twitch, and Games businesses — and report into me as well. Both Mike and Steve are excellent, deeply experienced leaders, and I look forward to working more with them both (and their teams).
This transition will happen effective January 1st, though Jeff will remain at Amazon through early 2023 to help ensure a smooth transition.
Please feel free to share the news with your teams as you wish.
Andy
Team, some news today:
I’m planning on retiring from Amazon in January, after more than 25 years and working closely with the company since its 1997 IPO. The last 18 months have been a thrill – working with all of you in GME and launching some of our biggest, boldest projects ever in entertainment and sports. But I’ve decided to spend 2023 differently, giving more time to family, and feel strongly this is the right decision for me. Andy & I have been working through a transition plan and he’ll be sharing those details soon, stay tuned.
Amazon’s opportunities in media, entertainment and sports have never been bigger. I see exciting times ahead for you all. Please know that I’ll remain close … as a fan, mentor, and ambassador for Amazon’s creative businesses – forever. I’m very grateful for all the close friendships, across all the 25 years, and all of the teams, studios, streaming services and businesses that we were able to build together.
Thank you, amazing Amazonians. –jblack
This story was originally published by The Hollywood Reporter.
Advocates representing a wide cross-section of the music industry are again urging Congress to pass the Help Independent Tracks Succeed (HITS) Act, the long-simmering legislation that would provide an extra tax break to musicians, technicians and producers for recording sessions.
“Prior to the conclusion of the 117th Congress, the American music community calls on you to support American music creation that is still reeling from the pandemic by passing into law the bipartisan and bicameral Help Independent Tracks Succeed (HITS) Act,” reads a Nov. 15 letter sent to Congressional leadership, co-signed by 23 groups across the business.
The Recording Academy, which made the bill a major focus of its Grammys on the Hill event in April as well as its annual District Advocate Day in October, continues to lead the charge. During the latter event, held on Oct. 6, approximately 2,000 Academy members participated in lobbying for the HITS Act and other music industry priorities at nearly 200 U.S. congressional offices in Washington, D.C.
“Our hope is that we can get it done here before the 117th comes to a close because we have a lot of bipartisan support, bicameral support [in the] House and Senate,” says Recording Academy CEO Harvey Mason jr. “I really feel like this is something we should be able to get done and we’re hoping we can get done in the next few weeks.”
The HITS Act would allow musicians, technicians and producers to deduct 100% of recording expenses up to $150,000 on their taxes in the year they’re incurred. That’s a change from the current law, which requires music creators to amortize those expenses over the economic life of a sound recording, a period that usually ranges between three and four years.
The bipartisan bill was first introduced in the House on July 31, 2020 (followed by a companion bill in the Senate on Dec. 3, 2020), though it failed to pass as part of the two pandemic relief packages or as part of the $3.5 billion budget reconciliation package known as Build Back Better, which was ultimately halved and renamed the Inflation Reduction Act of 2022 before being signed into law in August. Now, with only a month to go before the changeover to a new, split Congress — Democrats will retain control of the Senate while Republicans will control the House of Representatives — advocates are hoping the bill can finally, successfully make it through the gauntlet as part of a must pass bill during the last few weeks of the year.
“[During] the lame duck period with these must pass bills, if there’s any kind of tax language in there or any kind of economic language in there that ties in with this, we’re really hopeful it will get in this time around,” says Richard James Burgess, president and CEO of the American Association of Independent Music (A2IM), which has long served as a key advocate for the legislation.
In the entertainment realm, music production is an outlier in terms of taxation; film, TV and live theater productions already enjoy a 100% first-year deduction. The HITS Act would simply apply the same standard to music, Burgess says, while also encouraging future music creation: “I think if anybody needs it, it’s musicians that need it really badly. It affects independent musicians and independent artists and independent labels probably more than anybody else because they have less bandwidth financially. The idea of getting $150,000 per project [that can be] written off against your taxes in the year that you incurred it, could really make a difference between being able to make another record next year or not.”
Burgess adds that the bill won’t just affect musicians and producers but trickle down to other parts of the industry and the greater economy. “Every artist that makes a record, that has a knock on effect to many, many other musicians and ancillary workers in the music industry,” he says. “Getting these kinds of tax benefits will make a difference across the board.”
While Burgess and Mason jr. were both relatively confident HITS could make it through the next Congress given the bill’s bipartisan support, they’ve clearly grown impatient on behalf of creators, many of whom lost income during the early stages of the pandemic. After more than two years of disappointment, Mason jr. puts it in stark terms: “Yes, it could get passed next year, but…I don’t think we should continue to have it laid off and cut out of bills. This is something that’s important for us coming out of COVID. We’ve seen this community suffer enough.”
You can read the full Nov. 15 letter below.
Dear Speaker Pelosi, Leader Schumer, Leader McCarthy, and Leader McConnell: The 117th Congress has witnessed significant bipartisan and bicameral accomplishments that have benefitted American workers, families, and consumers, and levelled the playing field so some important domestic industries can grow. Prior to the conclusion of the 117th Congress, the American music community calls on you to support American music creation that is still reeling from the pandemic by passing into law the bipartisan and bicameral Help Independent Tracks Succeed (HITS) Act (H.R. 1945/ S. 752).
The HITS Act is a low-cost and commonsense modification to existing U.S. tax law that will incentivize the production of new sound recordings by allowing qualified productions to deduct 100% of their costs upfront. With an annual deduction limit of $150,000, the bill is designed and tailored to specifically incentivize independent creators and labels to produce new music, sparking important creative investments in countless music small businesses across the country. This targeted approach makes the HITS Act a fiscally responsible investment in the American creative economy.
The HITS Act also brings much-needed parity to the tax code for all creative industries. Currently, under Sec. 181 of the Internal Revenue Code, qualified film, television, and live theatrical productions may elect to fully deduct new production costs in the year they are incurred. Music production, which occurs in every state and congressional district, deserves the same treatment. Instead of being able to fully deduct production expenses in the year they occur, independent recording artists must currently amortize production expenses for tax purposes over the full economic life of a sound recording. For small creators, this timing difference slows down their reinvestment in new projects that can fuel growth. The HITS Act harmonizes the tax code and ensures that all the major creative industries are treated similarly.
As you consider end-of-year legislation, the music community strongly urges you to pass the HITS Act. It represents exactly the type of bipartisan, bicameral, and non-controversial economic investment that Congress should be proud to support. Passage of H.R. 1945/S. 752 is a smart and simple step that will make a lasting difference for countless independent music creators and music small businesses.
On behalf of the hundreds of thousands of music makers and music businesses across the country, thank you for your consideration.
Signed,
American Association of Independent Music
Artists Rights Alliance
ASCAP
Black Music Action Coalition
Broadcast Music Inc.
Christian Music Trade Association
Digital Media Association
Future of Music
Global Music Rights
Gospel Music Association
Music Artists Coalition
Nashville Songwriters Association International
National Independent Talent Organization
National Independent Venue Association
National Music Publishers Association
Recording Academy
Recording Industry Association of America
SAG-AFTRA
SESAC
The Society of Composers and Lyricists
Songwriters Guild of America
Songwriters of North America
SoundExchange
CC Chairman Ron Wyden, Senate Finance Committee
Ranking Member Mike Crapo, Senate Finance Committee
Chairman Richard Neal, House Ways and Means Committee
Ranking Member Kevin Brady, House Ways and Means Committee
Michèle Hamelink was named managing director of Sony Music Publishing Benelux. In the role, Hamelink will oversee and implement creative strategy across Benelux, including building and strengthening relationships with clients, local societies and industry partners and expanding songwriter support and service offerings. Based in the company’s Benelux office, Hamelink will also continue in her existing role of senior A&R. She reports to Sony Music Publishing president of international Guy Henderson.
Layla Amjadi was hired as head of music expression at Spotify. In her new role, Amjadi will oversee a team that builds formats enabling “artists, aspiring creators and fans to creatively express themselves through and around music in new ways.” She arrives at the streaming service from Gemini, where she served as vp of product and general manager. Prior to that, she worked in various roles at Meta/Instagram for nearly a decade. She reports to Charlie Hellman, vp and global head of music product.
BMG announced a new A&R structure for its Madrid-based operation, with Marcos Fairweather leading on the recordings side and Javier Doria fronting the publishing side. Fairweather joins from Universal Music Spain, where he was A&R director. Doria has been with BMG since July 2020, when he joined the company to lead A&R across publishing and recordings. Both will report to Albert Slendebroek, who also oversees BMG in Scandinavia. Under their direction, the company will target growth in the Spanish language market, with a renewed focus on established artists.
Dani Oliva was named vp of business and legal affairs at Suzy Ryoo and Troy Carter‘s Venice Music. Oliva, a transgender man, joins the company from Oliva Law Group, P.C., which he established in 2017. “We are beyond proud to welcome Dani to Venice,” said Ryoo in a statement. “With his legal expertise as well as the distance traveled in his personal & professional journey, he is an incredible addition to our team and community at Venice.” Oliva can be reached at dani@venicemusic.co.
The Association of Independent Music (AIM) appointed Nina Radojewski as head of membership, a newly created role that brings together AIM’s membership, events and marketing and communications functions under her leadership. Previously AIM’s professional development lead, Radojewski will oversee the creation and execution of the organization’s membership strategy while continuing to lead professional development initiatives for members, including the AIM Academy and the Associate Members’ Knowledge Base. AIM’s outgoing membership manager, Jude McArdle, is stepping down after more than five years in the role. Radojewski can be reached at nina@aim.org.uk.
Cameo Carlson was appointed CEO at mtheory, where she’s worked since 2017. Also promoted at the artist development and management services company are Michael Corcoran, upped to general manager; Carmela Frangella, formerly controller, elevated to CFO; Amy Davidson, promoted to executive vp; Vince Amoroso, named senior vp, head of marketing; Jonah Berry, upped to vp of marketing out of New York and Los Angeles; and Kaitlyn Moore, promoted to vp of marketing out of Nashville. The company also hired Ed Rivadavia as senior vp, head of digital. Carlson can be reached at cameo@mtheory.com, Corcoran can be reached at michaelc@mtheory.com, Frangella can be reached at carmela@mtheory.com, Davidson can be reached at amy@mtheory.com, Amoroso can be reached at vince@mtheory.com, Berry can be reached at jonah@mtheory.com and Moore can be reached at kaitlyn@mtheory.com.
On-demand vinyl platform elasticStage appointed Raoul Chatterjee as COO. He joins the company from SoundCloud, where he served as vp of content partnerships & operations. Based in London, the Billboard 2021 International Power Player will report to elasticStage founder and CEO Steve Rhodes. Chatterjee can be reached at raoul.chatterjee@elasticstage.com.
Megan Schultz was promoted to label manager at Riser House Entertainment. She will continue to oversee all label operations and scheduling for artists signed to the company’s Riser House Records label, along with label services clients. Schutz can be reached at Megan.Schultz@RiserHouse.com.
Chase Butters was named vp of sync at Concord Music Publishing out of Los Angeles. Butters will lead a team focused on increasing and enhancing Concord’s synch placements in advertising. He reports to senior vp of sync Brooke Primont and can be reached at chase.butters@concord.com.
ATC Management added a trio of new manager partners: Brandon Sanchez, Jordan Alper and Ben Rafson. All three will join manager partner Fabienne Leys and general manager Jessica Fekete at ATC’s newly opened New York office. Sanchez and Alper bring their joint management client Yaeji to the company, while Rafson brings artist clients Avalon Emerson and Jacques Greene. Sanchez joins from New York-based record label RVNG Intl. and also co-runs independent record labels SLINK and Human Pitch; Alper has worked as a talent buyer and producer for Red Bull Music Academy NY, Trevanna Entertainment and Does Festival; and Rafson, who has been in management for nearly 15 years with a focus on electronic musicians, recently founded and serves as executive director of The Rising Artist Foundation grant system. Rafson can be reached at ben@atcmanagement.com, Alper can be reached at jordan@atcmanagement.com and Sanchez can be reached at brandon@atcmanagement.com.
Melanie Seddon was promoted to vp of brand marketing at TuneCore. She will oversee all brand marketing efforts for the company as well as brand partnerships.
Elvin Sabla has been named creative brand director at Shore Fire Media, where he will oversee the PR firm’s branding and content strategy. Sabla most recently led editorial for Crypto.com’s NFT platform.
ASM Global named Kelvin D. Moore regional vp and general manager of McCormick Place Convention Center in Chicago. Moore will focus on creating new programs and partnerships. Moore was previously regional vp and general manager for ASM Global at the Pennsylvania Convention Center. He succeeds David Causton, who has served as general manager of the venue since 2004. Moore can be reached at kmoore@asmglobal.com.
Jen Moss was hired as a senior synch executive at Bucks Music Group. Previously at Warner Music UK, she arrives at Bucks after several years away from the industry for personal reasons. She can be reached at jmoss@bucksmusicgroup.co.uk.
Rebecca Trujillo Vest, Carls Woolf and Jordan Stobbe launched Pandion Music Foundation (PMF), a nonprofit organization designed to help foster growth in the music creator community by providing the tools and networks needed to build careers “across all lines of diversity and inclusion,” according to a press release. Partners at launch include Earthstar Creation Center, 2indie.com and Sweetwater. PMF previously partnered with 2indie, a synch coaching agency, to hold a global 24-hour “Sync-O-Thon” on Sept. 28, 2022, which helped support emerging artists by bringing in music professionals to provide feedback on their songs. PMF subsequently offered workshops by Sam Knack, Nick Phelps and others. Trujillo Vest, Woolf and Stobbe first met through an online songwriting course during the pandemic. Trujillo Vest can be reached at rebecca@pandionmusicfoundation.org and Stobbe can be reached at jordan@pandionmusicfoundation.org.
The estate of Luther Vandross tapped Epic Rights — part of Universal Music Group’s merchandise and brand management company Bravado — as the global merchandise management agency to develop a multi-category worldwide retail and e-commerce program for the late singer. The agreement will see a roster of new licensing partners create branded merch and other elements to extend Vandross’ legacy in advance of multiple anniversary celebrations slated for next year. Vandross released his solo debut album, Never Too Much, in 1981; he went on to release 11 consecutive platinum albums and win a total of eight Grammys. According to a press release, over his more than 30-year career, he sold in excess of 40 million albums worldwide and also produced records for Aretha Franklin, Diana Ross and Dionne Warwick. Next year is the 20th anniversary of both his Dance With My Father album and Live at Radio City Music Hall, which marked his final live performances. Other activations will include the launch of the Luther Vandross Foundation and a remix collaboration for Black History Month.
Full-service B2B distributor FUGA, a division of Downtown Music, partnered with electronic label Insomniac Music Group for a deal that will see FUGA provide a range of distribution, marketing and label services for several labels under the Insomniac umbrella, providing access to over 260 DSPs globally. Insomniac will also be utilizing FUGA’s sync and audience engagement services and have access to its trends and analytics platform. Insomniac additionally reached a deal with Downtown Neighbouring Rights.
China-based online music platform NetEase Cloud Music struck a licensing renewal agreement with Japanese entertainment company Avex. Under the deal, the companies will collaborate on promoting the presence of Avex artists on the NetEase platform. Avex’s roster includes Ayumi Hamasaki, Ai Otsuka, Kumi Koda, Awesome City Club, HIRAIDAI, I Don’t Like Mondays and NAQT VANE.
Actor and singer-songwriter Reneé Rapp signed with WME in all areas. Known for her role on the HBO Max series The Sex Lives of College Girls, Rapp recently signed with Interscope Records, which released her debut EP, Everything to Everyone, on Nov. 11. She continues to be represented by Adam Mersel of Immersive Management, Lisa Socransky Austin and Sloane, Offer, Weber & Dern LLP.
Universal Music Group (UMG) partnered with Artist Partner Group (APG) on The Fast & Furious: Drift Tape (Phonk Vol 1), “a fan-first mixtape” released in conjunction with character pieces from Universal Pictures’ Fast & Furious franchise that are meant to reintroduce characters to fans. Led by APG CEO Mike Caren and UMG’s Steven Victor, the project features music and collaborations from Phonk music’s biggest artists, including Kordhell, MUPP, Kaito Shoma, SCXR Soul and more. The full mixtape will be released Dec. 16.
Montreal-based pianist and composer Alexandra Stréliski signed to XXIM Records/Sony Music Masterworks. The first release under the deal is the song “The Hills,” which is Stréliski’s first new music in four years; she’s slated to put out a new album in spring 2023. All forthcoming music will be released by XXIM Records/Sony Masterworks worldwide, excluding Canada, in partnership with Montreal-based Secret City Records, her Canadian label home since 2018.
MOBO Group welcomed The Orchard to its recruitment and mentoring platform MOBOLISE, which launched in beta in 2020. MOBOLISE “supports and connects career opportunities to empower diversity, excellence and transformation in the workplace,” according to a press release, via a jobs board, mentoring and career development events and educational resources. It aims to create a more equitable industry by overcoming systemic obstacles faced by Black professionals. “MOBOLISE directly supports The Orchard’s goal to attract diverse talent by providing resources and information to the MOBOLISE community as well as direct recruitment opportunities to add to our workforce,” said Naledi Nyahuma Seck, vp of diversity & inclusion at The Orchard.
The Tahoe Douglas Visitors Authority and Oak View Group reached an exclusive multi-year naming rights agreement with Tahoe Blue Vodka for a new live entertainment, sports and conference center on the south shore of Lake Tahoe. Located in Stateline, Nevada, the 6,000-capacity Tahoe Blue Center is projected to open in July 2023 and host 130 events annually. The deal includes prominent exterior and interior signage. This is the first naming rights sponsorship for the vodka brand.
Payton Smith (“Like I Knew You Would”) signed with Combustion Masters, which recently released his latest single “Need You To Not.” Smith is currently in the studio with Combustion president Chris Warren at the production helm. New music from the singer, who’s signed with Eclipse Music Group for publishing, is expected early next year.
Independent digital distributor IDOL signed a full-service digital distribution partnership with independent label Fire Records, which boasts acts including Black Lips, Jane Weaver, The Lemonheads and Vanishing Twin on its roster. IDOL will handle the digital distribution of Fire Records’ repertoire to its global network of DSPs, excluding South Korea. Fire Records will also work closely with IDOL’s international audience development team on marketing and release strategy for frontline releases, with a dedicated specialist working on the label’s back catalog.
Q Prime South signed singer-songwriter Paul Cauthen for management. Cauthen, who will be on tour throughout December and into early 2023, is working on new music for release next year. His most recent album, Country Coming Down, was released by Thirty Tigers.
Warner Music Latina has signed emerging Mexican singer-songwriter Arriola to “continue the development” of his career within the regional Mexican genre, according to a press release. Arriola (real name Eduardo Arriola Gómez) — who released his first single “En Eso Estoy” when the label announced his signing — is also currently working on additional new music that will be part of his first album under the label. – Griselda Flores
Synch clearance and licensing software Trevanna Tracks partnered with music and cue sheet reporting company Soundmouse. The deal will allow Trevanna users to move song metadata, including splits and usage, from Trevanna to Soundmouse in order to generate accurate cue sheets. “Trevanna’s data and documents give production teams everything needed to air a synced song, but it doesn’t take the next step to ensure ongoing downstream payments,” said Jennifer Freed, founder and CEO of Trevanna Tracks. “This process was brilliantly sorted by Soundmouse.” Added Soundmouse head of business development Mark Vermaat, “This partnership enables collaboration between music supervisors and editors, saves time, and significantly lessens the margin for error in reporting royalties.”
Irish singer-songwriter Lisa O’Neill signed with Rough Trade Records for the release of her next album, All of This Is Chance, which is slated for release Feb. 10.
Country trio Track45 signed with UTA for booking. Comprised of siblings Jenna, Ben and KK Johnson, the group will be working with UTA agent Lance Roberts as its day-to-day. Track45 is signed to BBR Music’s Group’s Stoney Creek Records and managed by T.R.U.T.H. Management’s Missi Gallimore.
Nettwerk Music Group signed several new artists: lo-fi hip-hop producer linanthem; Sun Lo, a new project from artist-producer Attlas and songwriter-vocalist Richard Walters; alt-pop duo Bestfriend; beatmaker and producer Mr. Käfer; and disco-pop artist and producer Wingtip. The label recently released linanthem’s single “wind in my sails,” Sun Lo’s debut single “Factory Gates”; Mr. Käfer’s single “Blurred”; and Wingtip’s single “Mr. 29.” On Dec. 9, the label will release Bestfriend’s new single “LEMON LIME.”
Natalie Carr signed with Dallas Austin‘s distribution company DAD, which will release her new song “Drive.”
Mailboat Records signed yacht rock group Yachtley Crew. The outfit, which is managed by Andy Gould and is revving up for a series of monthly performances at Palms Casino Resort’s KAOS, recently released their first original song, “Sex On the Beach.”
Independent music company Concord is the latest to tap into a growing market for music royalty-backed securities with Concord Music Royalties, LLC, Series 2022-1, a $1.65 billion asset-backed security. The bond will be supported by mechanical, performance and synchronization royalties from more than 1 million assets.
The proceeds will be used to fund reserve accounts, pay transaction expenses, repay debt and for other general corporate purposes, according to a report by ratings agency KBRA.
KBRA gave Series 2022-1 a preliminary rating of A+ (on a scale ranging from AAA to D), citing the “large, diversified catalog with globally recognized songs and artists” such as R.E.M., Plain White T’s, Creed, Evanescence, Genesis, Phill Collins and Mike + The Mechanics — the latter three being purchased just two months ago.
The catalog generated $344.7 million in 2021, with 63% coming from recorded music and 37% from music publishing. More than 41% of the catalog’s assets were released more than 20 years ago and 23% are between 10 and 20 years old. About 3.5% of the catalog is comprised of frontline releases, defined by KBRA as “recently recorded and released music with little or no history,” and option rights that Concord can exercise for rights to future recorded music or publishing from artists in the catalog.
FTI Consulting put a $4.1 billion valuation on the catalog, according to the KBRA report. That’s about the same amount Billboard estimated Concord’s price tag would be when the company was exploring a sale in 2021 — before the purchase of the Genesis, Phil Collins and Mike + The Mechanics catalogs that Billboard estimated were worth at least $335 million and its acquisition of Australian music publisher Native Tongue. Concord had sought additional equity from its majority owner, the Michigan Retirement Systems pension fund, but turned to debt in 2020 to raise $600 million, which it used to pay down existing debt.
Among the offering’s sound recordings, Concord Music Group administers a majority and Universal Music Group distributes a majority. Concord Music Publishing administers most of the music publishing rights and ICE, ASCAP and BMI are the collective management organizations for most of the publishing rights.
Series 2022-1 contains two components: Class A-1 VFN, with a principal balance of $150 million and an anticipated repayment date of January 2026; and Class A-2, with a principal balance of $1.5 billion and an anticipated repayment date of January 2029. Class A-1 VFN will have a variable interest rate — the secured overnight financing rate plus a margin — and Class A-2 will have a fixed interest rate. The notes will pay interest quarterly.
Concord’s offering is the largest of the music royalty-backed offerings rated by KBRA in the last 12 months. KKR’s Hi-Fi Music IP Issuer II, backed by about 62,000 songs, raised $732.5 million in February. Crescendo Royalty Funding, a joint effort of Lyric Capital Group and Northleaf Capital Partners and backed by over 52,000 songs owned by Spirit Music Group, raised $303.8 million in Dec. 2021. Hipgnosis Music Assets 2022-1, backed by the Kobalt Music Copyrights Fund 1 that Hipgnosis Songs Fund acquired in 2020, raised $221.7 million in Dec. 2021.